Episode Details

Sysco Corporation (SYY) Q4 FY2026 — Q4 FY2026 (13 weeks ended June 27, 2026): sales $22.124B, UP 4.7%, a beat vs ~$21.95B. Adjusted diluted EPS $1.53 vs a $1.51 bar - a 2-cent BEAT. GAAP EPS $1.15. GAAP operating income +10.6% to $983M, but ADJUSTED operating income +4.1% and pretax earnings only +0.4%. FY2027 guided to 6-7% sales growth and 9-11% adjusted EPS growth ON A 53-WEEK BASIS. The 8-K was accepted 8:04am ET Tuesday Aug 4, before the open; the stock closed that reaction session down 2.58% at $82.79 and the week at $84.29. Sysco beat on revenue, beat on earnings, and guided FY2027 adjusted EPS up 9-11% - above the $4.96 consensus - and the stock fell 2.58% in the reaction session. Here is what the tape saw. The guide is explicitly on a 53-WEEK basis. FY2026 sales of $84.553B over 52 weeks is $1,626M a week; grown ~4%, the extra week is ~$1,691M of sales, worth about $0.12 of EPS after tax. The guide midpoint of $5.07 beats consensus by $0.11. The entire raise is one extra week on the calendar. Strip the week and the ~$100M AI cost-out ($0.16) out of the $0.46 of guided growth and the business itself is guided to grow 3.9% - against 3.4% last year. THE CALL: HOLD (3/5, FAIR VALUE $79 vs THE $84.29 CLOSE - A GOOD QUARTER, A GUIDE THAT IS MOSTLY A 53RD WEEK) — base-case value ~$79.0 vs ~$84.29 today. KEY METRICS: - CALL: HOLD 3/5, fair value $79 vs the $84.29 Aug 7 close = 6.3% DOWNSIDE. Bull $98, bear $68. Buy under $71. EV $52.24B = 11.9x FY2026 adjusted EBITDA of $4.39B. Net debt $11.73B, 2.7x. FCF $2.11B, a 5.2% yield. FY2027 guide midpoint $5.07 = 16.6x. - Street: Buy. 30 analysts (18 buy / 9 hold / 3 sell), average target $89.60, median $85, low $84, high $100. Around the print: UBS Buy $95 (Aug 4, from $90), Citigroup NEUTRAL $86 (Aug 5, from $82), Guggenheim $89 (from $87). What to watch: UP: sales $22.124B, +4.7%, a beat; adjusted diluted EPS $1.53 vs a $1.51 bar; U.S. Foodservice case volume +2.5% and local cases +2.6% in a soft restaurant market; free cash flow $2,114M, +16.3%, a 5.2% yield on a $40.5B market cap; operating cash flow $2,638M, +5.1%; International Foodservice adjusted operating income +15.7% to $228M, an eleventh straight double-digit quarter; a $2.17 dividend yielding 2.6% and covered more than twice; ~$100M of AI-enabled cost-outs identified for FY2027; and $250M of committed Jetro Restaurant Depot synergies still to come. DOWN: the whole guidance raise versus consensus is a 53rd week; U.S. Foodservice is 70% of sales and grew adjusted operating income from $1,058M to $1,059M, +0.1%, with gross margin down 26bps and adjusted opex up 4.7% on sales up 4.4%; FY2026 adjusted operating margin fell 6bps to 4.27%; 58% of FY2026 adjusted EPS growth was the share count ($0.09 of the $0.15) and buybacks fell from $1,250M to $200M with shares OUTSTANDING actually rising; 91.5M new shares are coming for Jetro; interest expense +12.9% to $717M before ~$21B of new deal debt arrives; and the stock fell 15.3% the day the $29.1B Jetro deal was announced. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.